The first U.S. store under the Mexx name will hold its grand opening Thursday at 650 Fifth Avenue in Manhattan, marking Liz Claiborne Inc.’s next step in expanding the brand it acquired in May 2001. Previously home to a Liz Claiborne store, the 17,000-square-foot unit looks upon the avenue with a glass facade and two airy levels.
Once shoppers enter the store, they’re in what Amy Shecter, vice president and general manager of Mexx USA, described as “the bait zone, the area where all the temptation starts.” From there, shoppers take in the first floor, which includes women’s dressy and casual apparel, accessories and a home area in the back with bath and beauty products and novelties.
The average unit retail price for Mexx falls in the $50 to $60 range. For fall, the collection is a mix of English tradition and urban chic, playing on a masculine versus feminine theme. Trends include military, cargo, satin, embroidery, Asian influences, tweed suits, shrunken blazers and bomber jackets.
Mexx’s lifestyle positioning gives it range, with the City line geared toward suits and workwear and the casual line focusing on items to wear to work and into the weekend.
Andrew Shannon, creative and visual director of Mexx USA, noted of the store: “We don’t want to give everything away. We like to play on the hard and soft, the yin and yang. We want people to walk away with a surprise.”
He likened it to an English garden, where each turn brings something new. Hence, the orange on the back wall of the first floor, which makes for an unexpected flash of color. Different areas of the store are also styled in vignettes, making it feel like a collection of various ideas under one roof.
On the second floor, which can be reached by an elevator and two staircases, one in the front of the store and one in the back, there is the XX line, which has a younger attitude and is a little flirty. There are also more selections from women’s, home and accessories, as well as men’s, which accounts for about a quarter of the store’s space.The upper level also has The Black Zone for women’s and men’s, which contains a selection of strictly black clothing. In all, 45 percent of Mexx’s offerings are black.
There’s a lounge area with several bright red swivel chairs and a love seat where shoppers can hang out.
“If you’re spending $50 on an item and want to sit in our lounge area and read a magazine, we’re OK with that,” said Shecter.
Some relatively empty space, for instance at the top of the staircase in the back of the store, has also been created to give shoppers a breather. Mexx is striving for an uncommon customer friendliness. In the dressing rooms, there are runners who can get other sizes, water coolers and candy for those with a sweet tooth.
Rattan Chadha, president and chief executive of Mexx International, who founded the firm and has stayed on to guide his company’s turbocharged growth under Claiborne, said he has learned to accept a different pace of things here.
The store, which opens after nine months of effort, would have taken two years to set up in Europe, he said. Mexx, while adjusted for the American consumer, is still selling the same free-spirited attitude built by the founder, which the company describes as optimistic, sympathetic, contemporary and non-conformist.
“New York is the ultimate challenge,” Chadha said. “Nobody’s doing new things. I think it’s nice to do something new.”
Mexx is new territory for Claiborne, as well.
“If we don’t hit the ball out of the park with the first swing, we’ll refine it and hit it out of the park,” said chairman and ceo Paul Charron at the store last week.
The confidence of his words was reinforced by his relaxed appearance, dressed casually in an all-Mexx outfit, including black suede jacket, camel cashmere blend sweater, striped button-down shirt and corduroy pants.
“This is a start-up in this country, but it’s a start-up from a position of strength,” Charron said.
Mexx already has 200 stores and 7,000 points of distribution across the world in 44 countries. There are no plans currently to sell Mexx in U.S. department stores, which could undermine the specialty locations.“We have taken the concept and imported it and Americanized it,” he said. “This is a derivative of an idea that’s already been proven in the marketplace.”
Charron is giving Mexx the royal treatment. In addition to putting the considerable resources of his company behind the brand, the ceo displayed personal interest in the little details of the store. For instance, he took notice of how promotional graphics were secured to the wall during a test run with Claiborne employees acting as shoppers before a quiet opening to the public last week.
Three stores will open this fall. In addition to the Fifth Avenue location, units will bow in Manhattan’s Union Square in October and at The Westchester Mall in White Plains, N.Y., in November. The Westchester store will encompass 5,400 square feet and is more of a model for the concept going forward. About 10 to 15 more will open next year, and if things go well the firm could ultimately grow to 200 to 250 stores in the U.S.
Charron was tight-lipped about volume projections for the Mexx brand, but did indicate that annual sales grew from $336 million in 2000 to more than $600 million.
“This brand has incredible legs,” the ceo said.
Given Mexx’s growth since being acquired and the prospects of U.S. retailing, it’s not hard to imagine the brand at the billion-dollar mark. Already, it’s roughly the size of Nautica and few in America have ever heard of Mexx.
“This has been a gargantuan undertaking,” said Charron, who chalked up much up the effort to the firm’s drive to diversify.
Over time, that drive has made Claiborne into one of the industry’s largest players with 30 brands under its corporate umbrella. “This is not your mother’s Liz Claiborne,” noted Charron.
Retail sales made up about $706 million or 19 percent of the firm’s $3.72 billion in volume last year. In all, the firm operates more than 500 stores, including Lucky and Sigrid Olsen units.
Charron said it was hard to tell how big a part of Claiborne’s business retail could become, but threw out the teaser, “We could buy a specialty retailer tomorrow and pick up 200 stores.”While Mexx brings with it to the U.S. a new name and a track record of going toe-to-toe with the fast-fashion retailers such as Zara and H&M, it also offers Claiborne a portal to Europe.
“We’re planning to export brands like Liz, like Lucky, like Juicy to Europe, with some adaptation, probably in ways that are heavily reliant on the Mexx infrastructure,” Charron said.
Already 20 percent of the firm’s sales come from abroad.
Such expansion and acquisitions are vital if the company’s going to keep growth up. On its own, Claiborne’s core department store business cannot grow much faster than a low-single-digit clip, said the ceo.
Wall Street is watching. J.P. Morgan Securities analyst Noelle Grainger said of Mexx, “I definitely think it could be a billion-dollar brand if the retail works.”
Grainger has Mexx modeled to grow 15 percent next year. Claiborne, she noted, has “worked hard to set up a separate retail entity that has a separate supply chain and a separate set of core competencies — that it’s not just leveraging a wholesale model.”
The firm has a good track record of executing on its strategic objectives, but the expansion of Mexx is not without its difficulties, said Grainger, noting customers will need time to fully connect with the unfamiliar name and retailing is inherently a difficult business.
“The overall retail environment in the U.S. is over-stored,” added Grainger. “There are too many stores, too much square footage.”
While there’s always room for an innovative concept, the analyst said, “They’re going to have to prove themselves on that front.”
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